PharmStar Outstanding Common Stock Reduced by 50%
October 17 2011 - 9:20AM
Marketwired
PharmStar Pharmaceuticals, Inc., (PINKSHEETS: PHAR) (the "Company")
today announced that its management and Board of Directors have
directed a "rollback" of certain large blocks of shares of
PharmStar Pharmaceuticals common stock held by management. This
"rollback" was effective as of today.
The "rollback" means that the Company's Chairman and CEO, Howard
Phykitt, has canceled and returned 535 million shares of his total
holdings of the common stock of PharmStar Pharmaceuticals to the
Company's treasury. He has accepted a series of warrants as
follows:
- A 5 year warrant to purchase 15,000,000 shares at $0.05 per
share beginning immediately;
- A 5 year warrant to purchase 15,000,000 shares at $0.10 per
share upon the closing of an initial round of financing, such
financing planned to be $5 million and targeted to close within 150
days;
- A 5 year warrant to purchase 15,000,000 shares at $0.15 per
share upon the closing of a follow-on round of financing, such
financing planned to be $2 million and targeted to close within 6
months after the initial round;
- A 5 year warrant to purchase 15,000,000 shares at $0.20 per
share upon the commencement of the Company's operations and
production of its products.
Additionally, the Company's Board of Directors has approved the
reduction of authorized shares of common stock from 1,001,184,352
to 650,000,000.
Prior to the rollback, there were 998,879,352 issued and
outstanding shares of common stock of the Company. As a result of
the rollback, there are now 435,000,000 issued and outstanding
shares of common stock of the Company, plus 15,000,000 set aside
for the initial warrants, plus 55,000,000 shares set aside for
future financings. This means that every shareholder of the Company
now owns a greater percentage of the Company by a factor of
approximately 2. The reduction of the total outstanding shares of
the Company implies a greater share value for the holdings of the
non-majority shareholders.
PharmStar CEO Howard Phykitt commented, "I am committed to
preserving shareholder confidence and value to our Company. I
sincerely appreciate the many investors who believe in our products
and what it is that we plan to achieve. In the interest of
maintaining shareholder value and adhering to our promise of
limiting the number of authorized shares of common stock, I am
surrendering the majority of my holdings of stock back to the
Company's treasury, which I trust will only serve to increase
shareholder value."
The primary purpose of the rollback is to spur the completion of
the Company's funding.
Mr. Phykitt stated, "We have been negotiating for about 45 days
on the best way to complete our financing for our expected rollout
of Aquaprin next year, and it became clear that the market would
best support this if we decreased the amount of shares available. I
was determined that this would not be done on the backs of those
that have supported this company, so I convinced all of the
original, large shareholders to retire a large percentage of shares
-- including me." Mr. Phykitt continued, "I made a promise to all
shareholders that this Company would raise the needed capital and
execute its business plan without undue dilution of its
shareholders.
A feature of the rollback plan will allow Mr. Phykitt to
purchase up to 60 million shares over time through the warrant
feature.
"The warrant structure highly incentivizes me to lead the
Company to a share price above the $0.25 mark," Mr. Phykitt
concluded.
About PharmStar Pharmaceuticals PharmStar
Pharmaceuticals, Inc. is a U.S.-based drug development,
manufacturing and marketing company and the innovator of Aquaprin™,
an FDA-approved Over-the-Counter (OTC) liquid pain reliever. In
development since 1993 with over $3 million invested to-date,
Aquaprin™ is a liquid derivative of aspirin based on a
patent-pending formula. The product is designed to dissolve nearly
instantly in just 1.5 ounces of water, which can be absorbed into
the bloodstream up to 10 times faster than traditional OTC pain
relievers, and with little to no stomach upset. PharmStar's
headquarters are located in Wilson, NC. For more information, visit
www.pharmstarinc.com.
Forward-Looking Statements Disclosure This press release
includes "forward-looking statements" within the meaning of the
federal securities laws, commonly identified by such terms as
"believes," "will," "looking ahead," "anticipates," "estimates" and
other terms with similar meaning. Although the Company believes
that the assumptions upon which its forward-looking statements are
based are reasonable, it can give no assurance that these
assumptions will prove to be correct. Important factors that could
cause actual results to differ materially from the Company's
projections and expectations are disclosed in the Company's filings
with the Securities and Exchange Commission. All forward-looking
statements in this press release are expressly qualified by such
cautionary statements and by reference to the underlying
assumptions.
Contact: PharmStar, Inc. 919-794-7000 info@pharmstarinc.com
www.pharmstarinc.com Investor Contact:
investors@pharmstarinc.com